United States District Court, C.D. California
ORDER Re: DEFENDANTS' MOTION TO DISMISS FIRST AMENDED COMPLAINT PURSUANT TO FED. R. CIV. P. 12(B)(2) AND 12(B)(3)
RONALD S.W. LEW, Senior District Judge.
Now before the Court is Defendants Fiberglass Industries Inc.'s and John Menzel's ("Defendants") Motion to Dismiss First Amended Complaint Pursuant to Fed.R.Civ.P. 12(B)(2) and (12)(B)(3). The Court, having considered all arguments that pertain to this Motion, now FINDS AND RULES AS FOLLOWS: The Court GRANTS Defendants' Motion to Dismiss for lack of personal jurisdiction.
Plaintiff CTG is an Indiana corporation engaged in the manufacture and distribution of textile products. First Am. Compl. ("FAC") ¶ 8. Defendant Fiber Glass Industries, Inc. ("FGI") is a New York corporation with its primary place of business in Amsterdam, New York. Id. ¶ 5.
Plaintiff manufactures and distributes textile products, including fiberglass. Id. ¶ 8. Starting on March 2014, Defendant FGI purchased seventeen orders of fiberglass from Plaintiff. Id. ¶ 9. Defendant usually had thirty days to make payment for conforming and accepted goods, and was subject to a 1.5% late charge on the entire balance for overdue bills. Id. ¶ 10. Defendant FGI failed to make payment on the seventeen orders made. Id. ¶ 11. As a result, Defendant FFI's outstanding balance is $457, 203.95. Id. ¶ 12. Plaintiff claims that Defendant FGI has made repeated assurances of payment, but has failed to pay. Id. ¶ 13.
Plaintiff asserts that "a substantial part of the events and omissions giving rise to this action" occurred in this jurisdiction, id. ¶ 2, and that Defendants have purposely availed themselves to the jurisdiction "through a number of contacts with and substantial business activities in this district, " id. ¶ 3. Specifically, Plaintiff alleges that Defendants: (1) initiated a business relationship with the Plaintiff being fully aware that its office was located in the City of Covina, Los Angeles County ("Covina Office"); (2) submitted purchase orders to the Plaintiff at the Plaintiff's Covina Office; directed payments to the Plaintiff at the Plaintiff's Covina Office; (4) contacted or submitted inquiries to the Plaintiff at the Plaintiff's Covina Office; (5) purchased merchandise from the Plaintiff for over three years; (6) submitted over 50 different purchase orders to the Plaintiff during those three years and (7) purchased approximately $2, 000, 000.00 worth of merchandise in the last three years, the overwhelming majority occurring in just the last year. Id.
Plaintiff further alleges that Defendant FGI is the alter-ego of Defendant John Menzel ("Menzel"). Id. ¶ 14. Plaintiff alleges that there exists, and at all times existed, a unity of interest, control, and ownership between Defendant FGI and Defendant Menzel. Id. ¶ 14. Individuality or separateness between Defendant FGI and Defendant Menzel does not exist, and to treat the acts in question as Defendant FGI's alone would achieve an inequitable result because Defendant Menzel in bad faith dominated and controlled Defendant FGI. Id. ¶ 15.
II. LEGAL STANDARD
Motion to Dismiss Pursuant to Rule 12(b)(2)
Pursuant to Federal Rule of Civil Procedure 12(b)(2), a district court cannot proceed against a defendant over which it lacks personal jurisdiction unless that defendant has waived the requirement. See Ins. Corp. of Ireland, Ltd. v. Compagnie des Bauxites de Guinee, 456 U.S. 694, 702-03 (1982). In states where no applicable federal statute governs personal jurisdiction, that state's long-arm statute applies. See Panavision Int'l, L.P. v. Toeppen, 141 F.3d 1316, 1320 (9th Cir. 1998). The exercise of personal jurisdiction over a nonresident defendant requires the presence of two factors: (1) California's laws must provide a basis for exercising personal jurisdiction, and (2) the assertion of personal jurisdiction must comport with due process. Hirsch v. Blue Cross, Blue Shield of Kansas City, 800 F.2d 1474, 1477 (9th Cir. 1986). California's long arm statute permits the exercise of personal jurisdiction to the fullest extent permitted by due process. See Cal. Civ. Proc. Code § 410.10; Panavision, 141 F.3d at 1320. "Because California's long-arm jurisdictional statute is coextensive with federal due process requirements, the jurisdictional analyses under state law and federal due process are the same." Schwarzenegger v. Fred Martin Motor Co., 374 F.3d 797, 800-01 (9th Cir. 2004). Thus, only a due process analysis is required here.
Due process requires that a defendant have "certain minimum contacts with [the forum state] such that the maintenance of the suit does not offend traditional notions of fair play and substantial justice." Int'l Shoe Co. v. Washington, 326 U.S. 310, 316 (1945) (internal quotation marks omitted). The plaintiff bears the burden of proving that each defendant has sufficient minimum contacts with the forum state that warrant the court's exercise of personal jurisdiction. Harris Rutsky & Co. Ins. Servs., Inc. v. Bell & Clements Ltd., 328 F.3d 1122, 1130 (9th Cir. 2003) ("Personal jurisdiction over each defendant must be analyzed separately."); Rio Props., Inc. v. Rio Int'l Interlink, 284 F.3d 1007, 1019 (9th Cir. 2002). Depending on the nature and scope of the defendant's contacts with the forum, jurisdiction may be general or specific to a cause of action. Roth v. Garcia Marquez, 942 F.2d 617, 620 (9th Cir. 1991).
When a defendant's contacts with the forum state are "substantial" or "continuous and systematic, " general jurisdiction may be exercised over that defendant for any cause of action, even if it is unrelated to the defendant's activities within the forum state. Schwarzenegger, 374 F.3d at 801-02; Data Disc, Inc. v. Sys. Tech. Assocs., 557 F.2d 1280, 1287 (9th Cir. 1977). In cases where a defendant's contacts are insufficient to support an exercise of general jurisdiction, more limited specific jurisdiction may be found where a cause of action arises out of or is related to the defendant's activities in the forum state. Burger King Corp. v. Rudzewicz, 471 U.S. 462, 472-73 (1985); Ballard v. Savage, 65 F.3d 1495, 1498 (9th Cir. 1995). "Specific jurisdiction may be exercised with a lesser showing of minimum contacts than is required for the exercise of general jurisdiction." ACORN v. Household Int'l, Inc., 211 F.Supp.2d 1160, 1164 (C.D. Cal. 2002). The Ninth Circuit uses a three-part test to determine whether there is specific jurisdiction over a defendant: (1) the defendant either purposefully directed its activities at the forum or purposefully availed itself of the privilege of conducting activities in the forum; (2) the plaintiff's claim arises out of or results from the defendant's forum-related activities; and (3) the court's exercise of personal jurisdiction over the defendant is reasonable. Boschetto v. Hansing, 539 F.3d 1011, 1016 (9th Cir. 2008).
As to the first prong, the Ninth Circuit generally uses a purposeful direction analysis when an action sounds in tort, whereas it uses a purposeful availment analysis when an action sounds in contract. Wash. Shoe Co. v. A-Z Sporting Goods Inc., 704 F.3d 668, 672-73, n.2 (9th Cir. 2012).
"When a district court acts on a defendant's motion to dismiss under Rule 12(b)(2) without holding an evidentiary hearing, the plaintiff need make only a prima facie showing of jurisdictional facts to withstand the motion to dismiss." Ballard, 65 F.3d at 1498. In order to make a prima facie showing, the plaintiff must produce admissible evidence, which, if believed, would be sufficient to establish the Court's personal jurisdiction. Enriquez v. Interstate Grp., LLC, No. 11-CV-05155 YGR, 2012 WL 3800801, at *3 (N.D. Cal. Aug. 31, 2012). Accordingly, a district court is to take uncontroverted allegations in the complaint as true. AT&T Co. v. Compagnie Bruxelles Lambert, 94 F.3d 586, 588 (9th Cir. 1996). However, "mere allegations of the complaint, when contradicted by affidavits, are [not] enough to confer personal jurisdiction of a nonresident defendant. In such a case, facts, not mere allegations, must be the touchstone." Taylor v. Portland Paramount Corp., 383 F.2d 634, 639 (9th Cir. 1967). See also Chem Lab Prods., Inc. v. Stepanek, 554 F.2d 371, 372 (9th Cir. 1977); Cummings v. W. Trial Lawyers Ass'n, 133 F.Supp.2d 1144, 1154 (D. Ariz. 2001). Parties may go beyond the pleadings and support their positions with discovery materials, affidavits, or declarations. Am. Inst. of Intradermal Cosmetics, Inc. v. Soc'y of Permanent Cosmetic Prof's, No. CV 12-06887 GAF JCGX, 2013 WL 1685558, at *4 (C.D. Cal. Apr. 16, ...